We're About to Discover If All Those New U.S. Jobs Are Any Good
(Bloomberg) -- The numbers show that the U.S. labor market is among the strongest in the past five decades. A government report this week will provide clues on how the quality of those jobs is measuring up to their quantity.
The Labor Department on Thursday will issue its first report in almost 13 years on contingent and alternative employment, counting the number of workers who are independent contractors or on short-term assignments -- in other words, much of what’s now commonly known as the “gig economy.” The last survey, in 2005, showed that 10.7 percent of workers fell into the category of “alternative work arrangements.”
Harvard University’s Lawrence Katz and Alan Krueger of Princeton University tried to fill in the gap with their own survey that showed America’s labor market was becoming more precarious. In late 2015, about 15.8 percent of employees worked as independent contractors and on-call workers -- including jobs such as driving a car for Uber -- up from 10.1 percent in February 2005, according to the economists’ 2016 paper. (They derived a slightly different 2005 number from adjusting the Labor Department data to more accurately compare with their own.)
The rise of short-term work in the age of internet-powered services may signal that this week’s numbers will show growth in such sectors. While providing jobs and wages, these positions tend to be less stable, lower paid and with fewer benefits like health insurance. Gains in freelance work may throw some cold water on an otherwise robust jobs market where unemployment is the lowest in 18 years and there are more open positions than people looking for work.
Torsten Slok, chief international economist at Deutsche Bank AG, sees the gig economy as more hype than reality. Its hold on workers is much looser than people think because most employees in such situations earn no more than 10 percent of total family income from such jobs, he said in a note to clients last month, citing Federal Reserve data.
The Labor Department’s report -- covering a May 2017 special survey -- is due for release at 10 a.m. in Washington.
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